How China Redefined a Key Energy Target to Control Carbon Emissions

This article delves deeper into the implications of China’s redefined energy intensity targets, providing a comprehensive analysis of their impact on carbon emissions control and sustainable development.

View of Guangzhou city skyline with modern buildings and skyscrapers. Guangzhou skyline, urban development, cityscape of Guangzhou, China.

China’s approach to energy intensity underwent a significant transformation recently, quietly altering the landscape of its environmental goals. The National Bureau of Statistics’ release of China’s 2023 economic and social data highlighted a nuanced yet crucial change that slipped under the radar of many observers.

The bureau’s report indicated that while energy consumption outpaced GDP growth, energy intensity had declined by 0.5%, seemingly paradoxical. This shift is attributed to China’s decision to redefine “energy intensity” to encompass only fossil fuel consumption, excluding renewable energy and nuclear power. While this change aims to focus on reducing fossil fuel intensity and potentially curb carbon emissions, its implementation reveals a scaled-back ambition, allowing for higher emissions within the existing target framework.

The 2024 target of a 2.5% reduction in energy intensity has also been impacted by this shift. Under the new definition, this target could permit a 2.4% increase in CO2 emissions this year if GDP growth remains on track, necessitating unprecedented progress in 2025 to meet climate commitments.

The backdrop of China’s post-zero-Covid economic resurgence has witnessed a surge in energy-intensive industries, accelerating energy consumption and CO2 emissions. Consequently, improvements in energy and carbon intensity have slowed, falling short of the targets set for 2025.

Energy intensity, a metric measuring energy consumption per unit of GDP, has been central to China’s energy policy landscape since the 11th Five Year Plan (2006-2010). Achieving energy intensity improvements involves enhancing energy efficiency and driving structural changes in the economy to favor less energy-intensive sectors.

While policies have yielded notable gains in energy efficiency, recent years have seen a reversal in structural changes, with energy consumption outpacing GDP growth in 2023 for the first time since 2005. This slowdown in energy intensity progress reflects a broader trend of increased energy demand, leading to a 3.8% annual rise in CO2 emissions from 2021 to 2023.

The exclusion of non-fossil energy sources from energy intensity calculations, though technical, carries profound implications. The redefined metric reduces the overall ambition by incentivizing the use of non-fossil energy sources to meet targets. Locally, governments can now achieve up to half of the intensity target through clean energy adoption, effectively halving their required gains.

Nationally, China aims to increase the share of non-fossil energy to at least 20% by 2025. This strategic shift, while favoring carbon emissions control, simplifies target attainment by focusing solely on fossil fuel intensity.

However, the challenge remains substantial. China’s commitment to a 2.5% reduction in fossil energy intensity in 2024 translates into a permissible 2.4% increase in CO2 emissions if GDP grows by 5%. To fulfill its 2025 carbon intensity pledge, China must exceed these targets substantially.

The shift towards fossil energy intensity targets aligns with broader efforts to transition from energy consumption control to carbon emissions management. Yet, without a clear timeline, this transition remains a work in progress.

The government’s choice to maintain modest targets likely reflects a strategy of prioritizing economic growth. By refraining from contractionary policies, China aims to boost clean energy investment while navigating energy-intensive industry growth.

In conclusion, clarity on China’s climate commitments is imperative for international credibility. The nation’s pursuit of redefined intensity targets underscores the evolving dynamics between economic growth, energy consumption, and environmental sustainability.